A months-long planning process to set a new course for downtown Little Rock calls for a tax increment financing district to incentivize redevelopment in the area.

The master plan, which brought together community leaders and residents to map out the downtown area’s future, sets a goal of doubling the population of downtown in the next 10 years. It calls for economic development strategies that have been used to revitalize downtowns in similar cities, including the creation of a so-called TIF district to encourage private investment and fund a number of the plan’s proposed projects.

Tax increment financing is a development strategy that freezes property tax collections at their historic levels and uses any growth in property taxes to invest in the district or pay off bonds that have financed district projects. The strategy is often controversial, because school districts, the largest recipients of property tax collections, would be denied funds that would have otherwise gone to them. 

The arrangement isn’t permanent, though. Arkansas law limits the lifespan of any single TIF district to a maximum of 25 years.*

Gabe Holmstrom, executive director of the Downtown Little Rock Partnership, said he supports a TIF district downtown and that it’s an economic incentive tool that is being used in “almost every other state.” Holmstrom said there are plenty of TIF success stories that have resulted in higher overall tax revenue. 

“Often, we are contacted by regional and national developers who are interested in investing in Little Rock,” he said via email. “When the conversation turns to available incentives, it becomes evident very quickly that we are not on the same playing field as our neighboring states.”

The master plan, which is expected to be considered by Little Rock’s board of directors this summer, says downtown has more parking spaces than people who live or work in the area. The plan, which refers to a “sea of parking” downtown, suggests using some of the city’s surface parking lots for mixed-use developments, the kind that bring together street-level retail with residential units above. 

Some people believe downtown lacks adequate parking, but that’s a misconception, Holmstrom said.  

“The complaints about lack of parking are really more of a reflection of our culture — no, you cannot park in the lobby of every business you want to visit in downtown — but parking is plentiful and available within a several minute walk of anywhere you want to go,” he said.

Holmstrom said Little Rock’s parking rates are affordable compared to similar cities. Parking companies have told him Little Rock has the lowest rates of any market they serve, he said.

The 134-page master plan also suggests downtown Little Rock reorient itself to take advantage of the Arkansas River. Other cities celebrate their downtown riverfronts, Holmstrom said, but just one downtown restaurant in Little Rock offers riverside dining. The Statehouse Convention Center, for instance, could expand to add an entrance on the back of the building facing LaHarpe Boulevard and the river. 

Holmstrom said there is “no doubt” the convention center and the Marriott Hotel need better parking and said he supports building a new parking deck for them. He said that would free up parking in the deck at Second and Main streets for use by the general public. 

The plan also calls for improving downtown infrastructure, changing how some streets are used, improving the connections between downtown institutions and neighborhoods, and making it easier to access the river. Little Rock residents can read the plan and offer comments here until June 6.

This story has been updated to clarify that state law requires tax increment finance districts to expire after a certain length of time.